Great news for students from 1st June with legislation that stops or limits the amount of fees letting agents and landlords can charge. That means no more fees for references, credit checks, administration or contract renewal.
Almost 3 years after the government proposed a ban on letting fees, the Tenant Fees Bill was finally approved in January. Analysis suggests private renters could save £300 on average every time they move house.
The bill underwent a few amendments over the years to reach this point – notably the closing of a potential loophole in the form of ‘default fees’. The bill now only allows landlords and letting agents to charge default fees for two things:
Replacing a lost key – with the cost of replacing the key limited to the landlord’s or letting agent’s reasonable costs, which must be evidenced in writing (i.e. they can only charge you for the cost of a new key)
Late rent – only applied after the rent is 14 days late, and with interest on any late rent limited to 3% above the Bank of England base rate. Landlords and letting agents shouldn’t incur unnecessary costs due to late payments but the bill only allows them to recoup the cost for genuine losses, whilst also protecting tenants from inflated fees.
It’s important to note that landlords can still recover money for property damages as they do now e.g. deducting money from the deposit at the end of the tenancy.
The bill caps the amount which can be requested for security deposits, reducing them from six weeks’ rent to five weeks in almost every case.
The bill introduces additional protections around holding deposits when a tenancy isn’t going ahead. Firstly, the holding deposit is capped at no more than one week’s rent. Also Landlords and letting agents are now required to set out in writing, why they are keeping a holding deposit within seven days of deciding not to go ahead with the tenancy, or they will have to refund the holding deposit.
What you need to do now
If a letting agent tries to charge you a fee after 1 June 2019, which isn’t the cost of replacing a key, interest for late rent, or is too much security or holding deposit they will be breaking the law. You can report this to Trading Standards.
Please be advised that they can still charge you fees up until 31 May 2019. If you sign a tenancy before 1 June which includes any fees, you will still be liable to pay them. However, tenants seeking or renewing new contracts in the first five months of this year should shop around and challenge contracts which continue to charge these unfair fees.